The micro-cap company makes money by giving away its games to owners of handheld units and turning a profit on in-game transactions and other add-on's.

NEW YORK ( TheStreet) -- I've found and interesting small-cap company operating in the mobile technology industry -- one that stood out from the pack because it has morphed two trends into one business model for those on the go.

But there's a catch: This microcap company is looking to make money by giving away their products.

Sound far-fetched? Not really, if you think about other consumer product companies. After all, Procter & Gamble's ( PG) Gillette and Energizer Holdings' ( ENR)Schick brands don't make money off the razor handles that they package with the razor blades. They're counting on repeat blade sales to drive profits.

The razorblade comparison isn't far off in terms of widespread use, either. Cell phones have become an integral part of many people's lives, especially smartphones. With integrated browsers and apps to meet any mobile need, we're using our phones to stay in touch with friends and family, check e-mail and play games.

The company I'm looking at is Glu Mobile ( GLUU), a small-cap company that develops games for handheld units.

The company changed its profit strategy once Niccolo DeMasi took over as CEO a year ago. Rather than trying to make money off the mobile market by selling its popular games, Glu Mobile now tries to sell the concept of microtransactions. It's generating revenue from millions of smaller in-game transactions, usually of a dollar or less, and from in-game advertising.

Glu Mobile's concept is that the users pay their fare for the software by buying add-ons, trinkets and little things that enhance their playing experience in a social atmosphere. By melding the type of game-playing you might encounter over a network using a Wii from Nintendo or an Xbox from Microsoft ( MSFT), with the mobile devices that we depend on, Glu is banking on becoming the ruler of a mobile social-gaming kingdom.

Glu Mobile is not a newcomer to gaming. The company is actually celebrating a decade of development this year. The company went public in 2007, but the stock raised some eyebrows on January 11, when it announced a secondary offering of 7.3 million shares at $2.05 apiece, a deep discount from the $2.34 price where they had been trading. The company plans to use the $13.8 million to speed up development of its gaming community, which is actually a good use of the money.